Rutendo Nyeve, Sunday News Reporter
THE Governor of the Reserve Bank of Zimbabwe (RBZ), Dr John Mushayavanhu, has reiterated his dedication to keeping the country’s inflation rate within the target of five percent.
Dr John Mushayavanhu
He emphasised the importance of effectively identifying and swiftly addressing emerging risks and vulnerabilities to achieve this goal.
This comes as the Central Bank has announced the exemption of electronic transactions of less than US$10 or the ZiG equivalent from bank charges, to promote the use of electronic means of payment.
In his 2024 mid-term monetary policy review statement, presented on Friday under the theme: “Consolidating Currency Stability to sustain low inflation and a stable Exchange Rate”, Dr Mushayavanhu said the monetary policy stance in the ensuing six months should consolidate the current stability and ensure that inflation expectations remain well anchored on the short to medium term.
“The MPC is strongly committed to its inflation target of five percent and remains highly watchful of emerging risks to mitigate the potential impact of high inflation on the economy. The Reserve Bank will, therefore, continue to sustain the ongoing stability by ensuring that emerging risks and vulnerabilities are properly identified and promptly addressed.
“The Recalibrated monetary policy has resulted in relative stability of the exchange rate and inflation in the economy. As such, to support consistency and predictability in the currency, the monetary policy measures will focus on incremental policy formulation and implementation rather than policy shifts and reversal aimed at addressing any emerging risks and shocks to the stability,” he said.
While announcing further bank charges exemptions on specific transactions, Dr Mushayavanhu said the RBZ has noted that most banks have stopped charging monthly maintenance or service charges for individual bank accounts with a conservative daily balance of US$100 and below or its equivalent in ZiG for a period of up to 30 days, calling on banks that are yet to align their systems to do so immediately.
“The exemption for monthly bank maintenance or service charges for accounts with a conservative daily balance of US$100 or below shall be extended to Micro, Small and Medium Enterprises (MSMEs) with effect from September 1, 2024.
MSMEs
“To further promote the use of electronic means of payment, the Reserve Bank is with effect from September 1, 2024, exempting electronic transactions of less than US$10 or the ZiG equivalent from bank charges. This measure will remove the cost of using electronic means of payments by according such transactions a near-cash characteristic, consistent with the Reserve Bank’s drive towards digital cash,” he said.
Turning to the uptake of ZiG in the economy, he said the Reserve Bank is satisfied by the general acceptance and uptake of ZiG and to ensure increased circulation of ZiG in the economy, various measures will be undertaken.
“These measures include to increase the injection of cash in line with demand while preserving the ongoing initiatives to entrench the country’s cash-lite economy; continue to inject more small ZiG denominations into the economy to ease the problem of change and eliminate the rounding up of prices by businesses;
“Work to smoothen the glitches that have been observed in the distribution of cash and ensure that ZiG reaches the remote and rural areas and the informal markets to effectively foster financial inclusion; and expand initiatives such as the Homelink Swipe for ZiG kiosks and related arrangements to other provinces, towns and business centres to increase the wide usage of ZiG,” he said.
He said the domestic economy continues to show greater resilience despite the severe El Nino-induced drought conditions with the exchange rate and inflation stability expected to boost the country’s growth potential in the outlook period.
“The economy is expected to grow by two percent in 2024 mainly supported by increased construction, mining, tourism and distributional activities. Construction activities continue to benefit from Government capital projects in roads, dams and other critical infrastructure including localised projects financed by Devolution Funds.
“Economic growth is expected to rebound to above six percent in 2025, benefiting from conducive monetary and financial conditions from easing monetary policy across the globe as inflation dissipates and recovery of the agriculture sector from the El-Nino-induced drought,” he said.
